the secretary of state said the president opened the meeting by asking vladimir putin about russia's a legend election meddling -- a legend -- alleged election meddling. >> the president pressed president putin on more than one occasion about russian involvement. president clinton -- president putin denied russian involvement, as he had in the past. jessica: the meeting between presidents trump and putin lasted longer than anyone expected. it was scheduled for 30 minutes but went on for more than two hours. the u.s. and russia announced a cease-fire in an effort to reduce violence in syria. is revealinggon the number of civilians caught

in the crossfire in the battle against islamic state. says 630released today civilians have been killed in u.s.-led airstrikes. nearly half of those deaths occurred in or near mosul. the battle to retake the city has intensified in recent months. justin trudeau says he will deliver the keynote address at the national governors association meeting beginning thursday in providence. he says he wants to strengthen the vital relationship between canada and the united states. he says no other international relationship is more important to canadian prosperity. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪ live from bloomberg world

headquarters in new york. joe: we're 30 minutes from the close of trading in the u.s. u.s. stocks rebound from the biggest selloff since may after today's unexpectedly strong jobs were. joe: the question is -- "what'd you miss?" trumpt: president expresses concerns pressure interfered in 2016 u.s. elections. we speak to bill richardson on geopolitical fault lines. plus, in spite of today's strong jobs report, there has been no trump bump in the labor market since the new president took office. and go long chicken wings. we speak to a morgan stanley on investment picks. at where theok major averages stand as we head to the close.

abigail doolittle standing by. >> thanks, joe. heading into the close on this summer friday, we have the dow s&p 500, and nasdaq all higher -- the dow, s&p 500, and nasdaq all higher. something that really stands out -- prior to today's trading action, they have been on pace to weekly declines, but we are now looking at weekly gains for all three major averages. first of all, we see all green. on top, technology, the beaten-down sector really rebounding today. on bottom -- actually, energy is not the worst mover. we will be taking a look at some of those in a moment. apple and microsoft helping technology, gaining on the day. the best point boost for the s&p 500. looks like there is some by the p mentality.he di

we have chip equipment companies receiving bullish mentions from and morgan stanley. turning to oil, one of the big drags on the markets today. we see oil is down nearly 3%, despite the fact we had that very bullish inventory report yesterday. investors and traders seem to be looking past it. it does appear to be a bit of a , so some aret taking profits heading into the weekend, and that is dragging on a wide variety of energy stocks. finally, this seems to be a theme -- tech up and energy down on the year. this is a year to. in white, we have technology, up on top despite the pullback that happened in early june. well outpacing the s&p 500 in blue, up 8%. down on the bottom, energy, down

15%. this sector rotation out of energy into technology. interesting to see how it all plays out after earnings season. joe: thanks very much, abigail. scarlet: you are looking at live shots of the streets in hamburg, germany, where protests are getting more heated and violent. there have been reports of protesters torching cars and blocking roads. reinforcements had to be called to control running street battles. this is as the world's biggest economies began their discussion -- the leaders of the world's biggest economies began their discussions. again, a fire there the streets as protesters gathered in a continuation of the protests we saw yesterday. julia: we saw this last night. "welcome to hell" is apparently the theme of the protest.

from my experience being involved in these is you can see things very calm several feet down. we have to be cautious about what we see here. but the use of molotov cocktails earlier and water cannons yesterday to try to suppress some of the violence taking place. according to police, by friday evening in hamburg, at least 175 officers and many protesters were reported injured . this is a cumulative number since the protests began late thursday. about 100 protesters have been arrested. a live shot of have her, germany -- hamburg, germany. joe: for some context, we had the trump-putin meeting earlier today. some conflicting reports perhaps on what was and was not agreed to about how the parties saw various things, including the question of hacking during the

u.s. election. it is interesting that there are protests amid one of the more anticipated g-20's in a long time. julia: to your point, sergey spoke about giving trump assurances that there was no hacking. these other things they get talked about in the meetings, and some of them not necessarily able to be discussed afterward. anyway, let's get back to the top story of the day. president donald trump's lengthy meeting, of course, with russian president vladimir putin, their first ever face to face, at that summit in hamburg. here with what to expect is bill richardson, the former u.s. energy secretary joining us on

the phone now from massachusetts. thank you for joining us today. the fact that the russian leader and donald trump met, that they spent over two hours speaking -- is that a positive we should take from this meeting? cease-fire, of the how skeptical are you this will hold? actually, i think we have lost him. hopefully, we will be able to get bill richardson back. those are two of the crucial questions i am asking in light of this cease-fire. joe: we have had several cease-fires in syria since the start of the multiyear long conflict, so i don't know if there is any optimism that this will be different, that it will lead to a different result, but

any movement to stop the bloodshed would certainly be welcome. scarlet: it is scheduled to begin on sunday, so it is not thisiate, but, clearly, was negotiated well in advance of the actual meeting between trump and prudent. -- between trump and putin. have billarently, we richardson back. are you there? apparently, he cannot hear my questions. the markets optimistic as wage growth remains tepid. we will discuss that and, hopefully, we will be discussing the g-20 as well. stay with us. this is bloomberg. ♪

scarlet: "what'd you miss?" june's jobs report offered a positive surprise in the may .umbers

payrolls increased by 222,000, but the labor force participation rate still new lowest level in more than three decades. joining us now is bloomberg intelligence chief economist. this not to that, not too cold. carl canght check that hear us. carl: loud and clear. goldilocks report. the last few months, it looked like the payroll trend was starting to wane off. economists wondered if the economy is actually losing momentum. after all, we had this very weak first-quarter.

auto sales had not been great. there was potential customers were not rebounding to the extent he thought and keeping the economy on solid footing. the strong payroll number today is a sign of continued momentum for the economy, but the ongoing mystery is why we are not seeing more wage pressure. ok, well, you are the economist. karl: so let's solve the mystery so, let's solve the mystery. i brought some charts with me. if we bring up chart number one on the screen, i show average testy earnings, and we this against other variables. we have the official unemployment rate. -- if i give it

a letter grade here in the current cycle, i would give it a c minus p are let's move onto something else economists have been tracking. obvious flaws with the official unemployment rate. underemployment and whatnot and marginal participants. when we look at that chart, it looks a little bit better, but again, i'm going to only give it maybe a c plus. if we look at the right side of the chart, again, most of these unemployment metrics have not been good predictors of wage inflation. yet, every time we talk about wage inflation, we revert back 6o talking about u3 and u unemployment. because there are difficulties iserstanding how much slack in the labor market, let's look at underemployment instead of

unemployment. you see the employment population ratio. much better correlation. you say i am a tough grader, but when the student does well, i will reward it. i will give this a minus or maybe even a solid a. this is telling you there is some shadow slack in the labor market not being reflected in the other measures. if we could run through the charts real quick, go back to chart one. the unemployment rate has blown through the roof of the last cycle. chart two, the u6 rate not quite back to the levels of the previous cycle. looking at the third chart, we can see it has only recovered about a third of the distance from its pre-recession peak, so this is telling you the inflationistas as their need to be patient -- inflationistas out to be patient.

we have considerable time. if this is the case, the fed may be able to dial back the speed with which they are normalizing policy. there were hints in the june fomc meeting. i think those calls will intensify when we get potentially a soft cpi number next friday and as we see the idiosyncratic factors janet yellen talks about are not as narrow as drug prices. was riveting, by the way, going through all those charts. carl: my pleasure. julia: "what'd you miss?" going back to the top story of the day, president donald trump's lengthy first ever meeting with russian president vladimir putin at the g-20 summit in hamburg. for more, bill richardson, former new mexico governor who

has also served to ambassador of the united nations and as u.s. energy secretary. he joins us on the phone from massachusetts. can you hear me? oh, my goodness. i'm so sorry. we are going to keep trying. i promise this is the last time we are going to do that to you. carl, can you still hear me? karl: -- carl: i hear you loud and clear. julia: i love live television. this is great. we can go again and get fixed income's reaction to the data. we are changing it up. winning. from new york, this is bloomberg. ♪

julia: "what'd you miss?" data released this morning shows 220,000,olls topped

but worker payrolls rose less than expected. discussed the weakness in wage growth and how that relates to the direction in treasury yields. >> we are seeing a broad synchronicity in terms of global growth recovery. the headline number today supports that further, and that is perhaps what is driving this and a broader easing of financial conditions. let's make no mistake -- as long as that continues to be the case, the fed will continue on its path as normalization. normalization. we saw a somewhat tepid number come through this morning on wage inflation, but remember this is a median number we are looking at. a study last year look at what has been the wage inflation for continuously fully employed employees, and it has actually

consistently been above the rate of inflation and at 2015 came in -- in 2015 like 3.5% came in at something like 3.5%, for example. perhaps we are seeing workers on a part-time basis and younger individuals suppressing that number somewhat. also, how we are measuring and capturing productivity. we will eventually see price pressure in wage inflation as long as financial conditions remain stable and the fed continues on its course. >> we have been speaking on this program again and again and , and it seems to be just buyy treasuries -- " bu treasuries" with you guys. >> the fact is bonds are winning. you're supposed to have real wage growth. the fact that we have not had wage growth is really

exceptional. i think there's a huge shadow supply of excess labor. the global competitiveness that is out there is really keeping inflation below target around the world. the fed -- they are having an argument, and this number makes the difference. the argument is -- should we run that maybement rate is too low or should we risk an explosion in inflation early on? they want to bring on the jobs and get the employment to population ratio much higher. the crash in the financial long waynd this has a to run. if there is going to be a bad spot for bonds, it would be the last 12 months. i think the market is eroded. >> let me defend robert. the funny comment is more from the inflationistas than from

robert. he has a 30-year track record. effectively, we have an looking for inflation to come back ever since the financial crisis. nothing. nothing. therefore, the burden of proof really is on the people who look at the data 15 different ways and conclude that someday, withow we will end up inflation, and that is what we should be trying to protect ourselves against. what the world wants more than anything else is a good bond, and i think that is a driver of yields more than anything else. >> i think that this whole idea that the inflation argument is going to keep the fed from doing what they are saying they will do, which in addition to hiking is reducing the size of their balance sheets, is not going to be an effective argument. the fed is going to continue on this path, and i think there is a lot of complacency around the reduction of -- around what

effect the reduction of their balance sheet may have on the markets. if you look on the year and the fed is reducing and potentially a couple more hikes are baked in and you have oil in the 40's or 60's, and you now do not have the amount of global appetite know, a negative right? bond in europe, i think all of those facts will continue to push bond yields higher, irrespective of what that inflation number is. real: that was "bloomberg today.earlier a reminder, you can catch the show each friday at 12:00 p.m. new york time right here on bloomberg. scarlet: things are heating up in hamburg. let's get the latest from matt miller who joins us from his hotel room via phone.

i understand you can see from your hotel room. give us a sense what you are seeing. matt: it is important to keep in mind that there are many different protest -- for many different classes, i should say, going on at different parts of the city -- many different clas hes going on a different parts of the city. that importantp travel routes for dignitaries, leaders, and for cargo shipments from the port. hamburg is the biggest port city in germany and one of the most important port cities in all of europe. on those streets, they have lit cars ablaze in order to try to g-20 leaders and all the commercial shipping coming from those areas, those port destinations. what i can see from my hotel room, what i saw moments ago is hundreds, if not thousands of staging a peaceful

demonstration. but there are, of course, the less peaceful demonstrations. as a result of that, you can see plumes of black smoke rising from different parts of the city. julia: what can you tell us about the government response in terms of preparation and policing out on the street? we saw the protests last night, and you described those as well. have they stepped up security? matt: they have definitely asked for help. police are used to dealing with left wing extremists here. it is one of the big flashpoints berlin.ny along with they had 17,000 people already, police officers, already on the streets with water cannons, with covers rate. -- with water cannons, with pepper spray, in full combat gear. many are wearing facemasks

protesters have reportedly been attacking them as well. joe: matt, thank you very much. scarlet: the market closes next. from new york, this is bloomberg. ♪

♪[music]

you miss?" stocks rally, aided by a reprieve from the bonds market sell-off. >> if you're tuning in live on twitter, we want to welcome you coverage.sing , every weekday from 4 to 5 p.m. eastern. >> we begin with our market minutes. so much for that sell-off yesterday in equities. recovery today with the nasdaq up by better than 1%. points. solid 92 >> once again, it's tech with the big swings. gettingy, tech hammered. today, tech leading the day. report. decent jobs increase more than expected. june.0 for the month of unemployment rate did creep higher. not asins, however, robust as some had anticipated. let's take a look at the sector breakdown for the s&p 500. joe, you mentioned technology leading the way.

that's certainly what we see here with the information index up by a quarter, one and a quarter percent, i should say. discretionary stocks, the auto makers, retailers, home builders, up. downside, telecom and energy. names illy the tech want to focus on here. apple, for instance, according analyst, had steady iphone sales in the third with sales stable to improving. 1% gain inod for a the stock. tesla rebounding just a bit by still down 13% on the week. two weeks ago, it is trading at 383 a share. now it's 313. it's been a rough couple of weeks there. and the chip device company is said to be considering a sale, it has expanded its business. this is according to people familiar with the matter. say that the company is working with the financial

advisor to evaluate sales options. we'll keep you posted on all developments there. >> a quick look at u.s. bonds.ent of course, really, stocks getting a reprieve today from bonds. as much action there as we've seen. roughly yields, unchanged. and 2.39. sort of whipped around a little bit in the immediate wake of that jobs report at 8:30 time, before settling a little bit higher. >> i think what we saw, little well, givingds as back the dollar advantage here. you can see the u.s. dollar tenth of a percent gain. growth.ng strong jobs, goldilocks, the sweet spot, i think we can say for the federal reserve. looking at the dollar. at one point, we were above 114. highest its been in six weeks. euro, also the highest since late june. it's come off slightly in the

last couple of hours. a rise in the deposit rate over the next year. it, gives you a sense of over the last week or so, since draghi's comments. accuracy -- quick check on what's going on in the emerging market as well, because in terms of a reprieve for stocks, some quietness now in the bond markets today, allowing a rally in en. finally, a quick look at commodities. board today,the 2%.taking a hit, down over below $45 a barrel. 1%. down a little bit, over and silver down nearly 3%. and lots of action in silver today. take a look at the chart

of silver, early on in the we had intense selling. people were talking about a flash crash. in the day, the selling got even worse and still days.eally ugly these nobody wants it. also, precious metals -- silver, wants that? >> ha ha! >> let's take a one-year chart of gold. looking real good. sort of bounded back a little bit. now lately it's been pretty week w the rates rising. we have a chart coming up later that talks more about this, but not good times in precious metal land right now. >> those are today's market minutes. "what'd you miss?" stocks continue to consolidate recent gains. sector rotation has been a bigger challenge. joining us now for the equity week, bloomberg's chief equity strategist. tech is really the lead sector.

upthe down side, to the side. the volatility we've seen there, you can't say there's complacency as much anymore. >> not at all. we're at 15-year highs in tech relative to the s&p 500. it's the sector that led on the upside. we're still looking at 17% gains tech sector. pretty strong up trend. has emergedtility over the last couple of weeks. >> this is just a pure ratio, right? just a ratio between the volatility of tech shares the s&phe volatility of 500 shares. you can see where the volatility in this sector is really leading the rest. this sector is also the largest in the s&p 500. 22% of the index. have this sort of budding concern on the part of the investor base. what happens is it spreads to the rest of the index. enough inses get big tech, you start to see selling occur in the rest of the sectors as well. occurred.t >> historically, has that happened?

>> it does when tech gets big enough. we've postulated that tech is not big enough for that to happen this time around, but who enough?at is big certainly in '99, 2,000, when in 2000, when tech became weak, it weakened across board. it's not that 30% mark that you typically find, the bigger evolve.es but 22% is still a hefty share. guard.want to be on >> another sector that's really been in the spotlight since the financials, been deregulation, hopes of steeper yield curves. theaw it jump up in financials. here we have a chart going back, chart.year this blue line -- this is the ratio of financials, the overall s&p. measuring not raw performance but outperformance, versus the treasury. you've also spotlighted a period in 2013. that mighted then inform what's happening today?

>> we call these the two market. in the bond in 2013, you had a tantrum in the bond market affiliated when to talkrman started about maybe we start to taper the purchases on the balance sheet. tantrum.hat the taper in that period, stocks managed to rise through the period, but volatility emerge. the long bond rate rose or the by 110 bases points. a lot of movement. financials tripled the performance of the s&p 500 in with thatd of time, increase in long bond. again, post-trump -- i call that the trump tantrum -- you saw an 80 sum basis ride in the 10-year treasury yield. you also saw financials again of thethe performance s&p 500. what tends to happen when these bond market prices fall quickly financials outperform. what's really interesting about this period is financials are though this is another tantrum, even though 25d yields have only risen bases points. draghi tantrum

this time around. >> much as the investors continue to buy into the trades. underlying issues of fundamentals in the equity market? back end of 2016, we kept missing the rally that we were seeing in the market, as about theit's not fundamentals. because all these corporates are still buying back their own shares. then look at the chart that we -- that you brought along. quite amazed, looking at the drop-off. >> yes. a couple things have happened. they have dropped off a lot, in the first quarter and in the second, including the financial sector. is tech companies are not buying as much in terms of shares as they have in the past. >> well -- >> prices are high. but also investors are not paying you back. they're not paying the companies to give them the shares anymore. in this-- what we show chart is actually the share

price reaction to buybacks. your one month share price for buying back shares is low, in to what it usually is. this is two back-to-back quarters in which you're getting nothing from investors for buybacks. so there's a lot of reasons, are companies disincentivized. instead, they're paying for capital spending, growth. but buybacks have taken a back seat. interesting it was the way julia characterized that, saying it's not based on it's allmentals, buybacks. do people have a sort of anti--- buyback? even though it's buying, somehow that doesn't count as real buying? >> well, they haven't. as the chart showed, investors reward buybacks. historically that share count reduction has worked in the favor of the companies. what's interesting about this cycle is that buybacks usually price, so as prices go

go higher.backs in the last two yaurts, that hasn't -- two quarters, that hasn't happened. >> companies don't have a good timing of purchases. >> either they're just a lot smarter or something really is strange. >> how does that set us up for the earning season? a lot of companies will be announcing typically share buybacks. >> we'll see. the board areoss pretty high. maybe buyback announcements are valuable. certainly for financials, there still is a reward. that's the one sector where buybacks, dividend payments are accelerating, and investors are rewarding that. so with financials aside, i will be interesting to see if the companies are still announcing buybacks. i think there's going to be an focus on m-and-a. that next source of growth, because the investors

have told them that's what they .hould be focused on >> listening to investors. thank you so much. equity strategist. >> coming up, finally the face-to-face meeting between trump and vladimir putin, who came out on top? we'll have analysis from new york. this is bloomberg. ♪

>> let's get to more news this afternoon. in hamburg, germany, are turning to water cannons in an effort to contain protests. nearly 200 police officers have now been injured in clashes with protesters. world leaders gathering for the talks have condemned the violence. g20 summit, the highly anticipated meeting between trump and putin took place.

mr. trump said he's looking forward to a good relationship with putin. very good talks. we're gonna have a talk now. obviously that will continue. but we look forward to a lot of happening.ve things russia, the united states, and for everybody concerned. >> the trump-putin meeting is overshadowed by allegations of russian meddling in the election. yesterday president trump might havessia played a role. attorney general jeff sessions bayisiting guantanamo prison today. he says he wants to gain more understanding of current facility. at the cuba sessions has long been a vocal supporter of the continued use of guantanamo, calling it a, quote, very fine place for holding these kind of dangerous criminals. majority leader mitch mcconnell plans to produce a new theacement bill for affordable care law in about a week. he's leaving open the possibility of a plan b if the

effort falls short. mcconnell says if common ground the party,ed within they could take action on the private health insurance market. day,l news, 24 hours a powered by more than 2700 journalists and analysts. jessica summers. this is bloomberg. let's get you miss?" more analysis now. the deputy direct at the institute for advanced russian studies. from washington. will, thank you so much for joining us. i just wanted to ask what you meeting, this two-plus hour meeting between putin and president trump. when i see comments like this from the foreign minister, saying that -- i kind of worry that trump is going to be softcized for being too here. >> that is the opinion as to did.president trump

secretary of state tillerson gave a much more forceful statement. said that president trump pressed president putin about meddling. and president putin naturally denied it. if you look at the u.s. i think there was an attempt as an attempt by trump to press the matter of hacking. but also an attempt, ideally, to behind him.er that president trump can say i confronted vladimir putin. it,ld him we didn't like that the united states was concerned. but we should move forward. just don't think that, in light of the current political controversy surrounding the investigations, surrounding all the people involved in those thistigations, that meeting is somehow going to put the issue of russian hacking behind president trump. >> well, so a lot of people thought it was very interesting and important that the meeting was two hours. i guess it was originally planned to be 30 minutes. is that really a big deal? does that tell you?

>> i don't think that's a big deal at all. pretty 30 minutes was a modest anticipation of how long this meeting was going to last. you also have to remember that were involved as well. so that means the meeting was really half as long when you thatt the amount of time has to take place during translation. i think most people anticipated that the meeting would last longer than a half hour. >> so in addition to the election and in addition to syria, obviously something else that we would expect the two or at least touched on is economic sanctions. russia's economy minister spoke and said that president putin confronted president trump with complaints sanctions. let's take a listen. notell, sanctions, it's including vladimir putin, he has ri reiterated, to, you k, discuss the fair trade between countries when some of the

countries implement financial restrictions for other countries. >> of course he never mentioned directly there. but i wonder to what extent will president -- the president hands are really tied when it comes to doing much on those sanctions. was almost unanimous in approving a bill imposing new sanctions on russia and limiting house's ability to roll them back. >> president trump has, as you littleery maneuverability on the question of sanctions. if he tried to lift them unilaterally, there's no doubt that congress would intervene and pass the legislation. and once the sanctions become law, president trump would lose his flexibility in terms of to use sanctions as leverage. it would be up to congress to sanctions.e so the russians consistently complain about the sanctions. at the same time, they say working.ot they're really not affecting russia's trade or economy. the factnk in light of that president putin on several occasions now has talked about remove sanctions

suggests they are still having an impact on the russian economy. a win for himd be back home if he did manage to force removal of them. talk about other meetings critically important as well, the meeting between trump and president xi jinping of china. of issueshole array between them, whether it's this taiwan arms deal. we have haley suggesting that we could see further trade trading withchina, north korea. how do you think that relationship plays out? are we looking at some form of trade war this time? think that president trump has, for whatever reasons, decided that the president of be the one who solves the problem of north korea. simple. just not that so i think he's raised expectations to what the chinese can do. walking into an area where the u.s. is

consistently -- consistently has less leverage than it has had in the past. i think that in light of the discussions about free trade, about problems with north korea, variety oft of issues, indeed the bigger story is the difficulties coming out g20, the difficulties with the u.s.-china relations and also the fact that the e.u. has pursued a free trade agreement with japan. and, again, president trump is who has backed away from free trade agreements, particularly in the pacific region. so the rest of the world is moving on in that sense in terms theursuing free trade and united states is not. >> do you think president trump cares? he doesn'tt now, care. but i think that over time, if wants the united states to be perceived as a leader in the world, and especially wants to be the leader and the supporter of free trade, which has always been one of the most american aspects of foreign policy, then eventually trump's speeches and his talk threatrotectionism, the

of now imposing -- this is not the united states the leader of free trade in the world. >> i want to ask you about the announced that was right after the meeting. obviously the two sides had worked on something well before in orderng took place to come out with that announcement. it's due to take effect on sunday. the follow-through on the execution will be the critical part. is the u.s. state department fully equipped or staffed to be able to follow through on this? hearing about shortages, and not enough staff. >> well, i think the question in terms of the state department and shortages and so forth is, continuea position to the negotiations after the cease-fire? are there enough people in place? more importantly, are there people in place that support president trump's agenda? in order to keep the forward?ons moving >> are there? >> it does not appear to be. trump has been very late in terms of making appointments to the state

department. it's really going to be up to secretary of state tillerson to push forward on these negotiations. and it may just be he's able to rely on career people who this.t but trump doesn't have his own allies in key positions to make these negotiations move forward at the pace he wants them to. questions than answers, g20.nk, coming from this just enactedlinois a budget for the first time since mid-2015, saving it from the only u.s. state with a junk bond rating. you can't miss, from new york. this is bloomberg. ♪

>> "what'd you miss?" you can find our charts using the functions at the bottom of this screen. i want to start off by looking illinois and the municipal bond market there. has ended its standoff for the budget, which is a relief for the bond market, which had been dealing with a possible ratings downgrade. illinois bonds, you are looking now at the jump-in price duehe taxable illinois bond in 2033. that big line up is the movement in price. an averageading at 95.5 cents on the dollar, up cents on june 30. higher prices mean lower yields. the prices come down a little bit is because the is not solved immediately. the budget doesn't actually have improve measures to illinois's capacity to address unfunded pension liabilities. >> yeah. concerns abouthe illinois's municipal -- fiscal awayh are going to go

completely. >> it's still at risk of a downgrade, in other words. what are you looking at? >> gold. and we mentioned earlier that it was a pretty ugly day for precious metals. good reminder. i saw this chart, from our bloomberg strategist. where gold to know is, forget volatility, all that other stuff. at where 10-year chips are trading. this is a chart of real rates, going back to 2016. last time real rates were down this low, gold was actually cheaper than it was -- sorry -- it's inverted. real rates were this the high, gold was actually cheaper.unce the fundamentallings are just looking -- fundamentals are just for goldeally ugly here. at least based on this measure, gold could have further to fall. >> i can't have you saying we about silver.

>> give me gold or give me nothing. [laughter] >> even with all the talk about the global economy, just finding traction -- >> yeah. no. be doing better. >> there's a dollar story in there as well, to tie into it as well. yes. >> and pretty ugly day across all of commodities, important to remember. oil down. wheat actually doing a little bit better. we've been talking about that all week. there you have it on gold. up next, a bad week for tesla's first modelwith the out.s rolling we'll discuss this and more up next. ♪

>> let's get to first word news this afternoon. president trump is still for hisg mexico pay proposed border wall. meeting with president enrique peña nieto, president trump said mexico should absolutely pay for the wall. mexico said it would do no such thing. meantime, homeland security sectosecretary is in mexico. awaited meeting between president trump and his russian today onrt happened the sidelines of the g20 summit. rex tillerson said the president meeting by asking russia'sc --vladimir putin abot

alleged election meddling. exchange on the subject. the president pressed president putin on more than one occasion regarding russian involvement. president putin denied such involvement, as i think he has in the past. the two leaders agreed, though, a substantial interest. >> the meeting between president longernd putin lasted than anyone expected. it was scheduled for 30 minutes but went on for more than two hours. british foreign secretary boris johnson has traveled to the in a bid to end the political crisis. his first stop, saudi arabia, of four nations to cut diplomatic ties with cutter. he is trying to get them to go along with the effort to end the tension. and the annual running of the today.icked off in spain three men, including two americans, were gored in the initial run. competitionus beast is a highlight of the nine-day fiesta. hours a day,4

powered by more than 2700 and analysts in more than 120 countries. this is bloomberg. >> let's get a recap of today's market action. so much for the sell-off in equities. a bounce-back led by -- what else -- technology shares, with the nasdaq up by better on a goldilocks job report. we didn't get the wage growth that some had been looking for, but the add of 220,000 was stronger than expected. the unemployment rate, however, did creep up by a hair or two, 4.4%. >> we did see a bit of a reprieve in the bond markets today too. in the capacity commodity phase. i have to mention silver here, given that we've abused it today. longest losing streak, a 17-month low. basicallyn the silver went back to its low. you have to wonder, is it really if people decide

those low levels are where they want to go anyway? you miss?d the first tesla model 3 rolled the assembly line today. sales and the plans to electrify the fleet send tesla down 13% this week. for more on the investment surrounding the bigger visit to electric vehicles, let's bring in the auto research. he joins us from the firm's offices in new york. good to speak with you. thanks for joining us today. >> thanks for having us. had downgraded tesla in may because of competition concerns from tech firms. saw risk related to tesla's exposure in china as well. 13% tumbleeek's reflect that, or is it something beyond those factors? >> i think it's something else. you know, sometimes stocks that 80% in just six month's time have to fall 10% or

20% along the way. a lot of it is technical. the market needed some excuse to kind of retrench a bit. the model 3 production timing, it wasn't any more -- it was within the range of expectations, but no better perhaps. so that provided a bit of reprieve. know, yourall, you mentioned this production stuff. the model 3. nothing yet has fundamentally changed the story of the road point?h tesla at this >> well, i'm not so sure about that. highlight our downgrade last month. we think that this is becoming a very crowded space. you've heard what apple describingcook, autonomous cars as the mother of projects. the lead analyst at apple believes firmly that apple is than a a competitor partner to tesla.

you saw the announcements with companies,car growing their fleet, trying to capture miles. and techhinese firms firms everywhere. there's so much darn capital chasing this area that tesla dominated up to this point and investors have to say, how long is tesla going to be the only town?n maybe not that long. >> so we've been teasing your chicken wings for the last three hours. say, and actually probably more. you say actually that picking the autonomous race is -- it's quite frankly early, but there are other stocks that perhaps could be winners as a result of the less we spend driving in the future. talk us through what your findings were. >> right. the path in autonomous and electric that storyelling involves collaborating with multiple sectors. asked an stanley, we 14-sector analyst a simple question. who is the best exposed? a lot of the names that came out

surprised some people. monetize the data and the time, the human time, spent in cars. 600 billion hours. that's 68 million years worth of cars.ty, spent inside every year! 68 million years ago, the late era, and the end of an so this is enormous amounts of time. tesla the best position company, or, you know, an auto position company to monetize that time? probably not. so that does open the door to ways for the amazons, googles,s and et cetera, to capture that time and be an even more invasive of your lives. that's just a living room on wheels. to boston at a loss. wings,ames, yes, chicken buffalo wild wings, that did surprise some people. digital content in the car but also physical

content such as alcohol and restaurants more frequently et cetera that we think were the values created transport service itself. >> you should probably invest in health care as well as be more.ng ha ha! >> good one. adam, a couple weeks ago, there was this story that came out launching its own streaming music service like spotify. id when i saw that headline, was like, oh, this is something made up by one of those fake headline generators. but it's real. i think you wrote about it, on this point, being that suddenly, you know, we have all these all these media companies are going to be vying for our attention. driving isture of going to change suddenly this face that we thought we had to away from the world is now going to be more ours. huh?n just be bombarded, >> or maybe you could sleep or have the seat scan your kidney and do anything. i mean, basically, anything but driving, right? drive if you want to,

but we think, just like let's say the horse wasn't suddenly declared illegal 100 years ago, 20-year period became not the ideal and certainly not the most economic transport. so, yeah, i think the streaming think is tesla's way of saying, apple, google, you might be able to monetize content in a way that we don't today, but the way you are, 10, 20 years from now, so we can toe to toe with you, if not -- not if but when you us.me a competitor to >> i was speaking to the cfo of we talked about the eco system. we were talking about the importance of owning the eco that these autonomous cars are talking, because if eachre not all talking to other, then you've got a problem with just one vehicle. i just look at what tesla is doing. wonder, when we see them launching rockets, it's about bee kind of satellite to able to control space and

therefore the eco system of this. give us your sense on the importance of the eco system the technologyt underlying it. >> well, i think you bring up a point. it is about the ecosystem. it's about the machine, the software. it's about the charging infrastructure. it's about the megafleet maintenance, keeping the car safe and clean. about aspects of bandwidth that might extend possiblye car, including satellite transport as you mentioned. adjacents there are sis between what spacex is doing doing. we've asked elon musk about that, about is there any rational-- you found between solar and your auto business. theabout the satellite or space business and the auto business? he wasn't drawn out on that. the rightk you've got idea with the way you're thinking. one thing. it's the collective ecosystem

that's important. that's within one company. wonder, for other companies, that may not have made autos a it tooic priority, is late for them to do that? is the barrier to entry too high? >> i don't believe so. i think that the vectors to think about are access to access to talent. to, let's say, ambition, if you will. elon musk has special talents the only one. look at the balance sheet that apple has. they have the ability to essentially buy tesla three times over. now, they may or may not do that. okay? speculating on that. but they certainly have enough money to maybe not be the first ecosystem but to be later, like they were with the phone, but to maybe do it in a way.special so these trillion dollar type companies, if they're thinking market, theyxt big can't exclude a $10 trillion market. they may attack it different

ways that might surprise you, but they certainly need to be to get involved at some point, if not the entire ecosystem. field could very well be wide open. thank you very much, global head research for morgan stanley. >> now, coming up on the day that president trump met with hamburg, putin in bloomberg reports reveal hackers plants. u.s. power the key suspect? you guessed it. russia. we discuss, next, from new york. bloomberg. ♪

>> the bloomberg scoop. at least a dozen u.s. power plants were attacked by hackers for the russian government. this comes according to current

and former u.s. officials. same daybreaks on the president trump met with russian president vladimir putin at the hamburg.t in for more, we're joined by michael riley in washington, one reporters who wrote the story. great to have you on the timing of this. it's uncanny. it's thehy we believe russian government. my other question would be, how is the u.s. government responding? >> it's been going on for some time. the hacks have taken place since may. intense.- pretty you've got at least a dozen u.s. power plants, all hacked within time.t period of the fingerprints look like they point to russia. and the context of one of this, the reasons why the u.s. government is so worried about it, if you look at what happened in ukraine over the last two years, that russian hackers have taken down the ukrainian power 2015, then first in again in 2016. they appear to be sort of

tools.enting with these when you put that together with russian hackers getting into 12 once, including nuclear power plants, it's got the government pretty worried. tomichael, what does it mean hack into a u.s. nuclear power plant? of course, a hack can be a range from, you know, perhaps something like shutting down e-mail to more potentially sinister stuff. do we know exactly what the hackers were able to do or how they were able to get? >> yeah. it's an important question. doesn't seem to be a short-term emergency here. i don't think there's any threat to public safety. hackers went in through the basic computer network of the plant, sort of business computers they use. but that's a pretty common trajectory. there's lots of evidence that be looking around to understand the structure of the network, to see if they can get from there into the control systems. that's a much harder step. the government sent out an alert last week.

it's very general but sort of of key details. one is that they seem to be persistence.about they're worried these hackers are going to bury into these and then at a time of their choosing, they can use that access to slip in much more sophisticated software. >> motive depends on who is doing the hacking. we mentioned how possibly these hackers were working for the russian government. are there any specific hackers,s to russian or russian state-sponsored signss, based on what have experts determined that russia is behind this? it.wo ways to look at some of the private companies who were doing responses, datare gathering a lot of now. they'll say it looks a lot like a group called energetic bear, which is associated with a lot of u.s. hits a electrical grids, institutions and facilities, a couple years ago. but it's really early and they don't have a firm identity.

government does have a far more interesting and powerful tool to do this. they hack the hackers. they have the ability to get behind this a little bit. they are pretty convinced or at this point they seem pretty convinced that it's russia. we talked with current u.s. thatials who indicated that's the direction everything was going. riley, bloomberg's security reporter in washington. the good news on this is that russian foreign minister lavrov it's aat the -- bilateral working group. good news. [laughter] >> up next, we'll have a preview of the week ahead in washington, testimony from fed chair elon. leader mitchjority mcconnell vowing to produce a new health care bill to replace obamacare. we'll preview all of that, next. this is bloomberg. ♪

>> "what'd you miss?" a lot happening in washington with testimony from fed chair janet hearing from president trump's f.b.i. pick and republicans fighting to save their health care bill. is bloomberg's chief washington correspondent. next, never mind about week. what about this week? it's been positively boring for you! been so bored, julia, i'm ready for next week. tense,look a little more though. ha ha! >> i'm going to the game tonight. so, you know, but it's been boring. all right. let's pull up the schedule for next week. busy week. off midweek, when we have senatetifying before the judiciary committee. that is the f.b.i. director nominee. that will be midweek. time, janetsame yellen, federal reserve chairwoman, on wednesday

the house before financial services committee. expect a lot of questions, both on wednesday and thursday, when she heads to the senate banking committee, on her political future. she has said, you guys, that she to stick around to finish out her term. but it's unclear. meanwhile, president trump is be continuing his trip abroad. and he'll be in france for some of his --s festivities of his own by the week. next mitch mcconnell, a new health care bill, sometime before next week as well. >> yeah. that, the newut health care bill. >> ha ha! >> how is it looking? for mitchny reason mcconnell to be optimistic about how this week is going to go, better than the one a couple ago? >> so, joe, a lot of members meetingrecess today, with constituents, for july 4 weekend, july 4 celebrations and have you. behind the scenes, senator ted republican from texas, has really emerged as the force, so to speak, behind the scenes, in

with the majority leader to help expand what is known as savings accounts in order to potentially bring this over the finish line, to get conservatives over the line. but when you start talking about planned parenthood and cuts to senior citizens entitlement programs, medicaid, and then, oh, yeah, opioid addiction a lack thereof, moderates like rob portman, hills, that's where things get tricky. can only afford to lose two fights. source wellfrom a placed that they actually want to avoid doing any type of recess unless they get this done. >> hmm. >> that will be interesting to see them avoid an august recess. ever't know if that's happened before. i wanted to bring up another point, another item on the in washington,k which is the hearing for christopher ray, who is the f.b.i. director. how contentious might that be? scarlet. contentious,

look, the president obviously earlier today meeting with discuss thein to meddling in the 2016 election. of course, this is being what right now what is being perceived as a somewhat successful meeting. but the white house feels that able toe been successfully move on from a lot of these narratives, at least for the time being. barring any new tweets from the president -- you never know any newm -- and barring developments into what has been going on with the russian investigation, as of now, it looks like this could be a somewhat low key, but clearly democrats and republicans are going to ask him significant questions, including just how he handle this ongoing investigation into the 2016 russia cyberattack. >> kevin, have a great weekend game!joy the it is time now for the bloomberg business flash. look at some of the biggest news.ss stories in the

a arrival big for encore, routers, and it comes after berkshire hathaway agreed to buy texas's transmission operator in a $9 billion cash deal. creditors the chargest of the energy future. it could concert its debt to -- debt to equity or use its rights to block the deal.ire hathaway according to a statement from largest life insurer, which adds an asset manager that $33 billion.man metlife will pay about $250 in for the deal which could close this quarter. and illinois bonds spiked today its firststate passed budget in two years and raised taxes. the house voted thursday to governor's vetoes of a budget package, ending the theest fiscal stalemate in u.s. in at least 70 years.

illinois's securities were the actively traded muni bonds today. and an bank plans to sell half of a $20 billion practice of pimco.orming lonzo t loans to m the bank is moving to divest the portfolio. he says after the approved no more there are systemic issues for italian banks. business flashr update. >> coming up, what you need to know for tomorrow's trading week. is bloomberg. ♪

>> "what'd you miss?" u.s. stocks rebounding, led by the nasdaq. of course this comes on the heels of a better-than-expected

the month ofor june. coming up, fed chair janet delivering her semiannual monetary policy report. it begins wednesday, to the house, and then she speaks to the senate on thursday. >> and i'm looking at the man not -- it's the new director. ray testifies before the senate judiciary committee on wednesday. offnd bank earnings kick next week. jpmorgan, citigroup and wells fargo on friday. >> that's all. >> have a great weekend! bloomberg. ♪

alisa: i am alisa parenti from washington and you are watching "bloomberg technology." hadidents trump and putin their first confirmed meeting

today in hamburg. trump confronted putin about russia's meddling in the campaign which putin denied. putin also complained about economic sanctions. thepresident also met with mexican president of the g-20 summit. trump still insist mexico pay for his proposed border wall. mexico said it would do no such thing. homeland secretary john kelly is in mexico where he watched troops destroyed poppy fields as part of the drug war. mitch mcconnell plans to produce a new replacement bill for the affordable care act in about a week but he is leaving open a potential plan b if the g.o.p. effort fall short. he says of common ground is not reached within the party, they could take private -- action on the private health insurance market. protesters and police clashing at the g-20 now. we wanted to bring you live pictures of that.